ISSI backs Nanya in specialty DRAM plan

LONDON – Taiwanese DRAM maker Nanya Technology Corp. has received about $200 million in backing from parent Formosa Plastics Group, including a $27 million equity investment from Integrated Silicon Solution Inc. (San Jose, Calif.) as part of a foundry supply deal.

ISSI said it made the investment through its majority-owned subsidiary Integrated Circuit Solution Inc. (ICSI), which received 443.7 million Nanya shares representing approximately 2.4 percent of total Nanya shares outstanding.

This strategic investment builds on ISSI's foundry partnership with Nanya. In return for its equity investment ISSI gains certain volume guarantees and access to more advanced process nodes planned for specialty DRAM production. Nanya will also provide support capabilities for the development of ISSI's NOR flash and analog products.

"We welcome ISSI as a shareholder and business partner," said Charles Kau, president of Nanya, in a statement issued by ISSI. "ISSI has a strong and growing specialty DRAM business closely aligned with our foundry capabilities and technology. We look forward to working with ISSI as a partner and customer to maximize our mutual opportunities in specialty DRAM technology, in particular for automotive, industrial and communication applications."

Kau is reported to have said that Nanya will exit commodity DRAM manufacturing within one year to focus on niche DRAMs because it can't compete with market leaders Samsung and Hynix.

Scott Howarth, ISSI's President and CEO, commented, "We are pleased to enter into this strategic partnership with Nanya to strengthen our long-term foundry support and supply. We believe this is an excellent opportunity to invest in additional capacity to expand our DRAM product line to higher density devices and more advanced process nodes. Our investment and partnership with Nanya will help provide secure foundry access for our sourcing needs, while also providing foundry support and technology development for our flash and analog product lines as we execute our growth plans in these new areas."

"Kau is reported to have said that Nanya will exit commodity DRAM manufacturing within one year to focus on niche DRAMs because it can't compete with market leaders Samsung and Hynix."
Has anyone ever made a profitable business making DRAM using trailing edge technology? Don't Hynix and Samsung have old fabs that fill this need?